dax 10600670 short term targetresistance almost reached but further potential upside remains intact

Daily Outlook, Thurs 22 September 2016

(Click to enlarge charts)

What happened earlier/yesterday

The Germany 30 Index (proxy for the DAX futures) has continued to push up higher within our expectation above the 10230 (excess) medium-term pivotal support that we have highlighted since the start of this week  our weekly technical outlook/strategy report (click here to recap).

The Index has shaped a further rally yesterday supported by the recent still “accommodative” monetary policies from the U.S. Fed and Bank of Japan. It is now coming close to our short-term upside target/resistance zone of 10600/670.

Please click on this link for a recap on our previous daily short-term technical outlook/strategy.

Key German/Eurozone economic data releases/events as follow:

• ECB President Draghi’s speech @1300GMT
• Eurozone Consumer Confidence for Sep (preliminary)  @1400GMT (-8.2 consensus)

Key elements

• The Index has shaped a significant bullish reversal (up 3% till to date) right above the predefined 10230 (excess) medium-term pivotal support which also confluences with the pull-back support of a former long-term descending range from  12 April 2015 major swing high (see daily chart).
• In conjunction, the daily (medium-term) RSI oscillator has also shaped a rebound from its significant long-term ascending trendline support and just surpassed the 50%v level. These observations suggest a revival in upside momentum which supports further potential medium-term price appreciation on the Index.
• On the shorter-term, the Index is now being supported by an ascending trendline in place since the minor swing low area of 16 September 2016 now at 10450 which also confluences with the 23.6% Fibonacci retracement of the current ongoing up move from 16 September 2016 low of 10245 (see 1 hour chart)
• The next intermediate resistance stands at 10780 which is defined by the medium-term swing high area of 11 August/07 September 2016.

Key levels (1 to 3 days)

Pivot (key support): 10450

Resistances: 10600/670 & 10450

Next support: 10230 (medium-term pivotal support)

Conclusion

Maintain bullish bias with a tightened short-term pivotal support of 10450 for a further potential rally towards 10600/670 before targeting 10780.

On the flipside, failure to hold above the 10450 short-term pivotal support is likely to invalidate the preferred direct rise scenario for a minor correction to retest the 10230 medium-term pivotal support.

Charts are from City Index Advantage TraderPro

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